Social Entrepreneurs: Stop Pitching and Start Executing

The Harvard Business Review recently published an article by Max Marmer addressing the issue of “celebretizing entrepreneurship” that echoed discussions my partner Garrett and I have been having around the office. In his article, Mr. Marmer states that this current trend “ends up severely circumscribing both the economic potential and societal impact of entrepreneurship by suffocating the early-stage startup ecosystem with increased noise, increased distractions, corrupted motivations and misapplied talent.” While I agree this is true in the traditional tech startup community, I am increasingly concerned that it is an even greater issue in our space of social entrepreneurship.

Although it has a long history, the for-profit social enterprise sector was still relatively unknown to the general public when the GoodCompany Ventures program began in 2009. Now there are an exponentially increasing number of entrepreneurs seeking to start businesses that change the world through their core operations. This trend has tremendous potential for positive impact but unlike other sectors where winners are rewarded through financial profitability, and the ineffective are culled by market forces, the social sector tends to receive heavy subsidy. These social enterprises are not held to the same standards as in conventional markets and there is little pressure to produce tangible results. Intentions and statements of purpose are often enough to merit rewards, both financial in the form of grants and awards, and social, from a variety of sources, and there is little pressure to produce tangible results. I have seen entrepreneurs collect nearly $1 million in prizes without ever impacting one life, and without being held accountable for their use of the money as they would in a traditional investment setting.

GoodCompany seeks to change this by bringing business rigor and standards to solving core social issues. We select our entrepreneurs for their innovation in tackling social and environmental challenges with new business approaches, and for their high impact potential. We take them seriously as entrepreneurs. Our programming is focused on the development of effective business models, rather than product development, which is unique in the incubator/accelerator community. Each week of our 12-week accelerator, the entrepreneurs are pushed to delve deep into one specific aspect of business development (e.g. Go to Market, Sales), then present their work to the peer group. Supported by MBA students and mentors, and encouraged by their cohort, we see the startups undergo remarkable transformations over the course of the summer. Since the formation of the GoodCompany Ventures program (now part of the larger GoodCompany Group), we have leveraged operating costs of less than $100,000 over four years to help our 40 graduates raise well over $30,000,000 in private capital. We draw companies from across the U.S. and around the world, and each year we have a few “celebrities” who choose not to fully engage in the hard work associated with our programming. Down the road, they are often disappointed to find that early positive signals of success do not equate to a lasting business success.

In his HBR article, Max Marmer closes by urging us to remember that entrepreneurship is not about “fame, glory or money” but rather about “building products that transform the world and drive the humanity forward.” This is especially true in the social sector, and to create the permanent changes we desire, we need to demand real-world results before offering rewards and celebrity.